Local Food Prices Research Articles

Unveiling an asymmetric relationship between global crude oil and local food prices in an oil-importing economy

Recent swift comovements of local food and global crude oil prices have attracted the attention of policymakers and researchers. To evaluate this relationship, many studies have used time series models to explore global crude oil and local food prices. However, robust research based on advanced nonlinear time series models that incorporate control variables for their formation is lacking. In this paper, nonlinear techniques are applied to assess the asymmetric nexus between Brent oil prices and local retail food prices in Slovakia. To estimate this value, we extend the single-threshold NARDL approach to the MTNARDL model. The nominal exchange rate and industrial production index are used as the control variables. Compared with conventional NARDL models, the MTNARDL model provides a more detailed representation of global oil‒local food price linkages and detects the asymmetric effect of global oil prices on food prices from both long- and short-term perspectives. Interestingly, with respect to long- and short-term food price volatility, changes in response to oil price fluctuations are greatest under a regime with rather a small number of positive and moderate changes.

The intergenerational impact of electoral violence on height and human capital

This paper examines whether prenatal, childhood, and teenage exposure to electoral violence has any long-term effects on height and human capital in Kenya. First, using the difference-in-difference estimator, we show that areas impacted by electoral violence see increases in local food prices and a decrease in annual nightlight, suggesting important local consumption shocks. We then identify people exposed to such violence using a nationally representative survey and take advantage of the temporal and spatial variation of electoral violence in Kenya between 1992 and 2013. Using coarsened exact matching, we find that exposure to electoral violence between prenatal and the age of sixteen reduces adult height. Previous research has demonstrated that protracted, large-scale armed conflicts can cause significant nutritional shocks and pass down stunting effects to descendants. In line with these studies, we find that the low-scale but recurrent electoral violence in Kenya has impacted the height-for-age of children whose parents were exposed to such violence while they were growing up. Only boys exhibit this intergenerational effect, possibly due to their increased susceptibility to malnutrition and stunting in Sub-Saharan Africa. The fact that most electoral violence in Kenya occurs over the school holidays may help explain why, in contrast to previous studies on large-scale conflicts, childhood exposure to electoral violence has no lasting impact on educational attainment.

Rising food prices and poverty in Pakistan.

An upsurge in global food prices in 2008 led to significantly higher food prices across the developing world. Global commodity prices have since declined but still remain volatile, but at the same time local food prices remain high in many countries. This study examines the potential impacts of the rise in food prices on poverty-income based poverty and calorie-based poverty- focusing on Pakistan, and its rural and urban areas. For this purpose, we used HIES data collected in three waves 2005-06, 2007-08 and 2010-11. Price elasticities are computed using binary Logistic regression method. The study results show that price of wheat, rice, milk, meat, fruit, pulses appear to distinguish the status of a household. Price elasticities shows that urban households are hit harder than rural households in calorie-poverty model. Overall, rising food prices are likely to lead higher poverty in Pakistan, as the negative impact on net consumers outweighs the benefits to producers. Therefore, effective strategy for eliminating poverty is far more concerned with price increases. Safety net programs can be more effective, but geographic targeting and other investments to strengthen safety nets are necessary to ensure that fewer people are affected by future crises. Government policies oriented towards relieving the food price pressure on the Pakistani poor should aim at lowering the prices of wheat, rice, eggs, oil, milk, and chicken.

Local Food Price Volatility and School Dropout in Sub‐Saharan Africa

AbstractWorldwide, children are enrolled in primary school in greater numbers than ever before. Nonetheless, school dropout rates are significant in many countries. A crucial factor in a child's education and potential for leaving school is their family's economic insecurity. Low‐income households, in particular, are highly sensitive to food prices, and increases in the cost of food staples can force families to sacrifice education to smooth food consumption. While earlier studies have relied on aggregate measures of economic conditions or are restricted to single countries and limited time periods, we take an individual approach and examine how education is affected by local food price volatility. Empirically, we combine individual‐level data on school dropout from 40 Demographic and Health Surveys in 14 sub‐Saharan African countries between 1992 and 2020 with geo‐referenced data on consumer food prices at local markets from the World Food Programme. Our results show that children are up to 8 percent more likely to drop out when local food prices sharply increase. Notably, this effect is strongest for older children, especially for boys. This demonstrates that economic instability during childhood can have long‐run adverse effects on individuals and has important implications for understanding the human capital costs of income crises.

Global drivers of local water stresses and global responses to local water policies in the United States

The rapid depletion of US groundwater resources and rising number of dying wells in the Western US brings attention to the significance of groundwater governance and sustainability restrictions. However, such restrictions on groundwater withdrawals are likely to generate spillover effects causing further environmental stresses in other locations and adding to the complexity of sustainability challenges. The goal of this paper is to improve our understanding of the implications of growing global food demand for local sustainability stresses and the implications of local sustainability policies for local, regional, and global food production, land use, and prices. We employ SIMPLE-G-US (Simplified International Model of agricultural Prices, Land use, and the Environment—Gridded version for the United States) to distangle the significance or remote changes in population and income for irrigation and water resources in the US. Then we examine the local-to-global impacts of potential US groundwater sustainability policies. We find that developments in international markets are significant, as more than half of US sustainability stresses by 2050 are caused by increased commodity demand from abroad. Furthermore, a US sustainable groundwater policy can cause overseas spillovers of US production, thereby potentially contributing to environmental stresses elsewhere, even as groundwater stress in the US is alleviated. These unintended consequences could include deforestation due to cropland expansion, as well as degradation in water quality due to intensification of production in non-targeted areas.

Food prices response to global and national factors: Evidence beyond asymmetry

The current series of studies examine how local food prices are affected by domestic and international factors. This research advances the existing body of knowledge by examining this effect at different quantiles, frequencies, and times. We use research data from January 1999 to August 2022 using three local and six global variables as independent variables. Additionally, our study uses recent econometric methods, including Wavelet Coherence, Quantile-on-Quantile Regression (QQR), and Granger Causality in Quantiles (GCQ). Moreover, this research uses the Quantile Regression (QR) approach to determine how reliable the findings are. Based on the GCQ approach, the results demonstrate that the correlation persists at most of the quantiles. Moreover, the WC results demonstrate a substantial association between local prices of food and the independent factors across various frequencies and times. Additionally, QQR estimates demonstrate that the impact of exogenous variables on food prices vary among quantiles. These findings are also supported by the QR method. Last but not least, our study offers policy suggestions obtained based on the results of this study.

The cost of healthy versus current diets in the Netherlands for households with a low, middle and high education

The cost of food is an important driver of food choice and most evidence suggests that healthier diets are more costly than less healthy diets. However, current attempts to model the cost of healthy and current diets do not take into account the variation in diets or food prices. We calculated the differential cost between healthy and current diets for households with a low, medium and high education in the Netherlands using the DIETCOST program. The DIETCOST program accounts for variations in dietary patterns and allows for the calculation of the distribution of the cost of bi-weekly healthy and current household diets. Data from the Dutch National Food Consumption Survey 2012–2016 was used to construct commonly consumed food lists for the population as a whole and for households with a low, medium and high education and linked to a local food price database. The average cost of current household diets was €211/fortnight (SD 8.9) and the healthy household diet was on average €50 (24%) more expensive. For households with a low, medium and high education, healthy diets were on average 10% (€17), 26% (€50) and 36% (€72) more expensive compared to current diets, respectively. All healthy diets could be classified as affordable (i.e. requiring less than 30% of the average disposable income) as diets required around 20% of the income. To conclude, while healthy diets were found to be affordable, we found that these were more expensive than current diets, especially for those with a higher educational level. This suggests that individuals will need to spend more money on food if they aim to adhere to dietary guidelines under the assumption that they will minimally adjust their diet. Bridging the gap between the cost of healthy and less healthy foods could be an important strategy for improving population diets.

Conflicts increased in Africa shortly after COVID-19 lockdowns, but welfare assistance reduced fatalities

Understanding how rises in local prices affect food-related conflicts is essential for crafting adequate social welfare responses, particularly in settings with an already high level of food vulnerability. We contribute to the literature by examining how rises in local food prices and the lockdowns implemented to contain the first wave of the COVID-19 pandemic affected conflict. We analyze real-time conflict data for 24 African countries during 2015–2020, welfare responses to COVID-19, changes in local food prices, and georeferenced data on areas with cultivation, oil, mines, all associated with differentiated risk of conflict. We find that the probability of experiencing food-related conflicts, food looting, riots, and violence against civilians increased shortly after the first strict lockdowns of 2020. Increases in local prices led to increases in violence against civilians. However, countries that timely provided more welfare assistance saw a reduction in the probability of experiencing these conflicts and in the number of associated fatalities. Our results suggest that providing urgent aid and assistance to those who need it can help reduce violence and save lives.

Food Inflation and Child Health

Abstract Malnutrition is one of the most important early life shocks that have lasting effects on health. An often neglected cause of malnutrition and hidden hunger is high food inflation, particularly in developing countries. This study uses the Ethiopian Demographic and Health Survey data, matching each child's early life age in months from the time of conception with the corresponding local monthly food price data to examine the medium-term and long-term impacts of exposure to food inflation during the critical early life window—pregnancy and infancy—on child health. Exposure to one percentage point higher month-to-month food inflation while in utero increases the risk of under-five stunting by 0.95 percent. The impacts are heterogeneous depending on the month of exposure, highlighting the complicated biological mechanisms through which malnutrition during early life affects human growth. The results are robust to various empircal specifications and potential biases arising from survivor sample selection and age misreporting.

COVID‐19 policy responses, mobility, and food prices

AbstractGovernments around the world have taken drastic measures to contain the spread of COVID‐19. Policy responses to the pandemic could affect local food prices in important ways. In this paper, we hypothesize that food prices in regionally integrated markets are more sensitive to mobility constraints than those in segmented markets. We use World Food Programme price data from 774 retail markets in 44 low and middle‐income countries to test whether and how food prices have been affected by the stringency of COVID‐19 containment measures. We assess market segmentation based on pre‐COVID‐19 price data and measure government responses using the Oxford Coronavirus Government Response Tracker. Our results show that more stringent policy responses increase food prices for integrated markets but not for segmented markets. The impact of the stringency of policy responses on food prices seems to be mediated by reductions in mobility and moderated by the dependence of markets on trade before COVID‐19.

Perceptive Factors That Affect Household Food Consumption Among Different Grassland Areas: A Case Study Based on Fuzzy Cognitive Map

Food consumption acts as an intermediary between ecosystems and human systems in grassland areas. In this study, we generated a fuzzy cognitive map (FCM) to obtain a semi-quantitative assessment of impact factors on food consumption in the Xilin Gol Grassland, China, from the perception of local rural households. Based on it, the food consumption impact factors networks of households in Xilin Gol Grassland were created. Results showed that household recognition of food consumption impact factors differed among grassland transects in both amount and category, and the results of principal component analysis (PCA) ascertain such differences and transitions. Livestock breeding, income, local economic development, consumption habit, age, food price, and cost were the most important impact factors mentioned by both farmers and herdsmen. From south to north in the grassland transects, households' cognition of ecological and economic factors increased, and the cognition of personal and social factors decreased. Differences in supply, culture, customs, and socioeconomic characteristics affected the cognition of households and their livelihoods, which influenced impact factors as well as associated connections. The role of livestock breeding also validated the connection between human actives and the grassland ecosystem. Results from this study can be used as a reference for policymakers during decision-making processes respective of regional sustainable development.

Sending out an SOS: using start of rainy season indicators for market price forecasting to support famine early warning

We examine relationships between the start of rainy season (SOS) and sub-national grain (white maize) market price movements in five African countries. Our work is motivated by three factors: (a) some regions are seeing increasing volatility SOS timing; (b) SOS represents the first observable occurrence in the agricultural season and starts a chain reaction of decisions that influence planting, labor allocation, and harvest—all of which can have direct impacts on local food prices and availability; and (c) pre- and post-harvest price movements provide key insights into supply-and-demand issues related to food insecurity. We start by exploring a number of different SOS definitions using varying reference periods to define whether an SOS is ‘on-time’ or ‘late’. We then compare how those different definitions perform in seasonal price forecasting models. Specifically, we examine if SOS indicators can predict price means over 6 and 9 month periods, or roughly the length of time from planting to market. We use different reference periods for defining ‘early’ versus ‘late’ seasonal starts based on the previous year’s start date, or median start dates over the past 3, 5, and 10 year periods. We then compare the out-of-sample forecast performance of univariate time-series models (autoregressive integrated moving average (ARIMA)) with time-series (ARIMAX) models that include various SOS definitions as exogenous predictors. We find that using some form of SOS indicator (either an SOS anomaly or 1st month’s rainfall anomaly) leads to increased predictive power when examining prices over a 6 months window. However, the results vary considerably by country. We find the strongest performance of SOS indicators in central Ethiopia, southern Kenya, and southern Somalia. We find less evidence in support of the use of SOS indicators for price forecasting in Malawi and Mozambique.

Modelling the symmetrical and asymmetrical effects of global oil prices on local food prices: A MENA region application

This paper explores the complex nexus between the global oil prices and the food prices of the Middle East and North Africa (MENA) region during the period 2000-2020. Both linear and nonlinear models of the autoregressive distributed lag (ARDL) approach are adapted into panel data form to investigate the symmetrical and asymmetrical influence of oil prices on food prices. The key results are summarized: (i) the long-term effect of oil prices on food prices is significantly positive including both oil-exporting and oil-importing nations. The positive impact on oil exporters-due to higher oil revenues-is greater than importing nations, leading to an increased demand for food. Additionally, the effect on oil exporters is negative and significant in the short term but not significant for importers. (ii) The nonlinear ARDL panel analysis for the whole MENA sample confirms the presence of negative short-term asymmetric behaviour due to the heterogeneous response within the oil-importing and oil-exporting samples, while in the long term, the asymmetric effect is positive, indicating that food prices increase regardless of fluctuations in oil prices. (iii) The nonlinear ARDL results using time series affirm the absence of an asymmetric nexus among oil and food prices for some oil-exporting nations (including Kuwait, Saudi Arabia, United Arab Emirates) and Tunisia within the oil-importing group. However, the food prices of other countries are asymmetric to the oil price. This study provides recommendations that are useful to MENA countries to establish a stable mechanism for oil and food prices to ensure food security in the region.

The local currency oil price and food price relationship for Turkey: a dynamic correlation and time-frequency dependency analysis

Food prices are important both socially and economically due to food's high share in the consumption basket of households. This study aims to analyse the dynamic correlation and causality relationship between local currency oil and food prices in Turkey by employing DCC-GARCH model as well as Toda-Yamamoto and Wavelet coherence causality tests using monthly data covering 2003.1-2020.1 periods. The results indicate that there is strong dynamic correlation between local currency oil and food prices over time. It is also found that there is unidirectional causality from local currency oil prices to food prices. The results underline the importance of oil prices and exchange rates to predict food prices in Turkey. Taking into consideration that oil prices can be accepted as exogenous variable, which could not be controlled by the countries alone, policies that would be adopted for the stability of exchange rates become more prominent for Turkey.

The local currency oil price and food price relationship for Turkey: a dynamic correlation and time-frequency dependency analysis

Food prices are important both socially and economically due to food's high share in the consumption basket of households. This study aims to analyse the dynamic correlation and causality relationship between local currency oil and food prices in Turkey by employing DCC-GARCH model as well as Toda-Yamamoto and Wavelet coherence causality tests using monthly data covering 2003.1-2020.1 periods. The results indicate that there is strong dynamic correlation between local currency oil and food prices over time. It is also found that there is unidirectional causality from local currency oil prices to food prices. The results underline the importance of oil prices and exchange rates to predict food prices in Turkey. Taking into consideration that oil prices can be accepted as exogenous variable, which could not be controlled by the countries alone, policies that would be adopted for the stability of exchange rates become more prominent for Turkey.

Seasonal, annual, and spatial variation in cereal prices in Sub-Saharan Africa

Local food prices are key indicators of food security and market conditions. Yet price data are often not available, particularly for rural areas of Sub-Saharan Africa. We compiled data from 168 markets to study spatial and temporal price variation. We found that prices slightly increase when the preceding growing season was dry. Across the continent, there is pronounced seasonal variation, with lowest prices 2–3 months after harvest and highest prices just before harvest. A predictive model explained 42% of the spatial variation in prices. Our results show that spatial and temporal price variation can be generalized and that prices can be estimated for unsampled locations or months. Such estimates may be used to improve the targeting of food security interventions and strengthen empirical policy-oriented research.

Impacts of Covid-19 on Food Security: Panel Data Evidence from Nigeria

This paper combines pre-pandemic face-to-face survey data with follow up phone surveys collected in April-May 2020 to quantify the overall and differential impacts of COVID-19 on household food security, labor market participation and local food prices in Nigeria. We exploit spatial variation in exposure to COVID-19 related infections and lockdown measures along with temporal differences in our outcomes of interest using a difference-in-difference approach. We find that those households exposed to higher COVID-19 cases or mobility lockdowns experience a significant increase in measures of food insecurity. Examining possible transmission channels for this effect, we find that COVID-19 significantly reduces labor market participation and increases food prices. We find that impacts differ by economic activities and households. For instance, lockdown measures increased households' experience of food insecurity by 12 percentage points and reduced the probability of participation in non-farm business activities by 13 percentage points. These lockdown measures have smaller impacts on wage-related activities and farming activities. In terms of food security, households relying on non-farm businesses, poorer households, those with school-aged children, and those living in remote and conflicted-affected zones have experienced relatively larger deteriorations in food insecurity. These findings can help inform immediate and medium-term policy responses, including social protection policies aiming at ameliorating the impacts of the pandemic, as well as guide targeting strategies of governments and international donor agencies by identifying the most impacted sub-populations.

Local food prices and the purchasing power of SNAP benefits

While the nominal value of Supplemental Nutrition Assistance Program (SNAP) benefits is fixed across states (except for Hawaii and Alaska), variation in food prices across the U.S. is dramatic. We provide new evidence describing geographic variation in the purchasing power of SNAP benefits, measured by the extent to which SNAP-recipient households are able to afford the Thrifty Food Plan (TFP), the U.S. Department of Agriculture (USDA) food plan on which legislated SNAP benefit levels are based. For more than one-quarter of SNAP households, SNAP benefits are too low to cover the cost of the TFP at the primary stores where they report shopping. SNAP purchasing power increases somewhat as we assume households can travel farther to shop and increases much more with the assumed ability to identify and travel to the lowest-cost store in a given area. It is unlikely, however, that SNAP households are sufficiently informed and mobile to shop at the lowest-cost store in a large (e.g., 10 to 20-mile) geographic area. We demonstrate that aggregate dollar shortfalls for SNAP households who cannot afford the TFP could be completely eliminated by redistributing from households in low-cost areas to those in high-cost areas, e.g., by indexing SNAP benefits to local food prices.

Oil-food price dynamics in an oil-dependent emerging economy

PurposeThis paper aims to examine the transmission from oil price to local food price returns in Nigeria from January 1995 to May 2019.Design/methodology/approachTo circumvent erratic behaviours and account for possibilities of noises at the edge of the wavelet signals, the paper combines wavelet and Markov-switching techniques to determine the significance and magnitude of oil–food price dynamics across different time scales.FindingsIt is shown that oil to food price pass-through changed across frequencies. Notably, results reveal a swift pass-through which signals the dominance of the direct effect of oil price shocks on food prices with evidence of weak spillover in the short term. The medium- and long-term horizons witness the dominance of the indirect effect of oil price shocks with much sluggish transmission to food prices; the highest significant pass-through of about 4% are also observed when the oil price is denominated in the naira–USD exchange rate.Originality/valueThe study improves understanding of the relationship between oil price shocks and domestic food price returns. It shapes policy prescription on appropriate inflation targeting strategies of monetary authorities.

Efecto de los cambios en el precio de los alimentos sobre el consumo de la quinua y la seguridad alimentaria rural en el Perú

The objective of this study was to determine the effect of changes in prices on food consumption of rural producers in Junin (Peru) in order to verify if there are some differences in food security between farmers who produce quinoa and those who do not. For this purpose, surveys were applied to 277 producers and the data from the National Household Survey (2016) were used to assess the dimensions of food security. It was found that local food has lower elasticity values than foreign one, but the variability of local food prices is higher. In addition, 27.3% of the population does not satisfy the caloric requirements, and that the quinoa consumption is associated with its nutritional value and cultural factors. In Junin’s rural population a low nutritional value consumption is evident, and there are not significant differences in the daily food consumption between producers who farm the quinoa and those who do not. Therefore, food price increases would equally impact both producer groups.